Discounts for council tenants who buy their homes will be increased to a maximum of £50,000 in England under a government plan to revitalise the "right to buy" scheme.

The proposal means discounts will be trebled in parts of the country, making it easier for some of the two million tenants of social housing in England to buy the property they live in.

The housing minister, Grant Shapps, said restrictions on discounts over the past few years made right to buy meaningless in many places, with fewer than 3,700 sales last year compared with a peak of 84,000 less than 10 years ago. He said the increased discounts would help to stimulate house building, as every social housing home sold would be replaced by another one newly built.

"The new homes for affordable rent will help get the nation building again, and help councils meet housing need," said Shapps, who is Conservative MP for Welwyn Hatfield.

Today, the maximum discounts range from £16,000 in most of London to £38,000 in south-east England. Several factors determine the discount to which a tenant is entitled, including how long they have been a council tenant and the age and condition of the property.

The proposals mean that someone in the West Midlands who has been a tenant for eight years on a household income of £20,000 could buy their £90,000 flat with a discount of £50,000, compared with the £26,000 discount now. In London, a tenant for five years buying a flat worth £160,000 would also receive a discount of £50,000 – more than three times the previous cap of £16,000.

Housing association tenants with a preserved right to buy because their home was part of a housing stock transfer from a local authority also benefit from the enhanced offer.

The increase in discount means that 65% of local authority tenants could afford to buy their homes, but few of these are likely to be eligible for a mortgage as only 16% of tenants are in full-time work, according to property analytics business Hometrack. It said the average capital raised from each right to buy sale would be £64,725, less than the current average of £77,470 and much lower than the cost of building and fitting out a new home.

Many tenants who exercised their right to buy in the past have run into financial difficulties. Some lost their homes. Campbell Robb, the chief executive of housing charity Shelter, said: "These levels of discounts will be extremely attractive, but it's vital that any new scheme includes rigorous affordability checks to make sure people can truly afford to buy their home and maintain it into the future.

"Our advisers see people who bought under previous right to buy schemes now living in homes fallen into disrepair because they cannot pay for the upkeep. We have to learn the lessons of the past and ensure this doesn't happen again."